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June 02, 2009

Desi handsets anyone?

As part of its recent cover story on telecom, Business Today has an article on companies which hope to tap into the Indian market for mobile handsets - but not necessarily compete with the Nokias and Samsungs.
...consider Intex Technologies, an Indian company which also sells laptops, monitors and other computing devices. Says Ramesh A. Vaswani, Vice Chairman, Intex: “We have no ambition to become either a Nokia or a Samsung. However, we certainly want to become the #1 Indian brand.” That’s not just talk: the company claims to be selling 60,000 handsets a month and hopes to double its sales in a year. And this from a company that started its handset business just two years ago. Playing in the Rs 2,000-7,000 range, the company focusses mainly on the Tier II and Tier III towns. Vaswani says the company’s brand has a recall and promises a “trouble-free product with good after-sales service.”

In fact, the rise of the Indian brands, which collectively hold around 15-17 per cent of the market, according to estimates, is a major defining trend of the Indian market in the last few years. What works for them is “proximity to the market, product quality, aftersales service capabilities and the fact that they have fire in their belly. They also introduced more simplicity in the trade,” says Pankaj Mohindroo, National President of Indian Cellular Association.

It is a competitive market in this business. Spice Mobile, which plays in the Rs 2,000-6,000 range, believes in providing the highest value in this segment. “We are not the cheapest, but we provide more value in terms of features or content,” says Payal Gaba, National Head, Marketing, Spice Mobile. The company, which entered into the handset business four years ago, believes consistency of product launches catering to the Indian customer (it averages two products a month), along with value for money and service capabilities, gives it the edge.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in